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Abstract The purpose of this study is to determine the factors that affect the quality of auditing activities in Vietnam. Through the method of qualitative research and quantitative based user auditing reliability Cronbach’s Alpha, testing factors explored (EFA) and the regression analysis, the results of the study showed much weaker influences with different levels of influence on the quality of independent auditing activities. Which elements of the organizational structure, scope of services provided are the factors that have the greatest impact on the quality of the audit. Besides the elements of the cost and staff capacity, ownership of enterprises audit, quality control work inside, quality control work outside also have implications significantly to the quality of audit activities in Vietnam.
International Journal of Business and Management; Vol 11, No 3; 2016 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education The Research of Factors Affecting the Quality of Audit Activities: Empirical Evidence in Vietnam Phan Thanh Hai1 Duy Tan University, Da Nang City, Vietnam Correspondence: Phan Thanh Hai, Ph.D, Dean, Faculty of Accounting, Duy Tan University, Da Nang City, Vietnam E-mail: phanthanhhai@duytan.edu.vn or phanthanhhai1281@gmail.com Received: December 18, 2015 doi:10.5539/ijbm.v11n3p83 Accepted: January 19, 2016 Online Published: February 25, 2016 URL: http://dx.doi.org/10.5539/ijbm.v11n3p83 Abstract The purpose of this study is to determine the factors that affect the quality of auditing activities in Vietnam Through the method of qualitative research and quantitative based user auditing reliability Cronbach’s Alpha, testing factors explored (EFA) and the regression analysis, the results of the study showed much weaker influences with different levels of influence on the quality of independent auditing activities Which elements of the organizational structure, scope of services provided are the factors that have the greatest impact on the quality of the audit Besides the elements of the cost and staff capacity, ownership of enterprises audit, quality control work inside, quality control work outside also have implications significantly to the quality of audit activities in Vietnam Keywords: factors, audit activities quality, Vietnam, quantitative research Introduction Until now, there have been many studies published on the independent audit and the factors affecting the quality of audit activities Among them can be raised in many research works of different authors related to the quality of audit activities and the factors affecting the quality of the audit, such as studies of DeAngelo (1981), Francis and Al (1987, 1988, 1999) on audit fees; Burton’s study (1986), Grimlund (1990), Lennox (1999), Shu (2000), Chia-Chi Lee (2008) on the audit firm size; Bonner's research (1990), Malone and Roberts (1996), Wooten (2003), Chen (2009) on matters related to the auditors, the study by Tran TG Tan (2009), K Tran Lam (2011), Ha Ha TN (2011) on control audit quality from inside and outside corporate auditor; However, in recently, no works of any published by author study factors affecting the quality of auditing in Vietnam This is also the reason for the author to undertake research on this topic and introduce detailed the contents of the study in the next section of the article Literature Review 2.1 The Quality of Audit Activities The quality of audit activities is the subject of research by many scientists until now and therefore there are many different views regarding audit quality Can typical views of GAO (2003, p 13), the quality audits are conformity with Generally Accepted Auditing Standards (GAAS) to provide reasonable assurance that the financial statements the audited and related disclosures are: (1) presented in accordance with Generally Accepted Accounting Principles (GAAP) and (2) are not contained the key issues related to false errors or fraud Other studies also point to this as studies of Tie (1999); Krishnan and Schauer (2001) There are also a number of researchers to follow the opposite direction it was introduced the concept of the poverty of the quality of audit by identifying the disadvantage results from audits (Peecher and Piercey, 2008) In addition to the above-mentioned there are also numerous other studies mentioned audit quality such as DeAngelo (1981); Watts and Zimmerman (1983); Lee et al (1983); Aldhizer et al (1995); McConnell and Banks, (1998); Krishnan and Schauer (2001); Wallace (1987); Beatty (1989); Krinsky and Rotenberg (1989); Davidson and Neu (1993) and some other authors 2.2 The Factors that Affect Audit Quality Recently, there are plenty of research on the quality and the factors that affect audit quality However in view of 83 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 the author can be divided into two main groups The First, the individual study of each factor affects audit quality This research direction is gaining the attention of many authors Typical of these are the following factors 2.2.1 The Size of Auditing Firms Accordingly to some authors showed that the larger audit firm size tend to provide better audit services (Burton, 1986; Grimlund, 1990) Research by DeAngelo (1981) also concluded the audit firms, which has large scale is often evaluated higher quality in the market than a small company Also Lennox (1999) and Shu (2000) suggested that the auditing company with the large of scale and resources may reduce the possibility of the litigation and ensure the maintenance of quality of audit services at a high level The research of author Chia-Chi Lee (2008) also pointed out that the size of the audit firm have significantly affect to the performance, especially in the relationship between the type of comparison between the international audit Firms, large-size audit firms, medium-size audit firms ; however, these affection is trivial in comparison relationship between, medium-size audit Firms and small-size audit firms Thus, studies of the authors clearly explain the relationship has influenced the scale of auditing firms to audit quality 2.2.2 Non-Audit Services Provided by Audit Firms There are multiple authors mentioned this factors Basically results show that this is a relationship factor inversely to the quality and efficiency of the audit Experimental research via surveys 1,500 auditors of Lindberg and Beck (2002) after the Enron showed that most of the auditors agree that the client service would harm the independence of the auditor In terms of professional ethics once independence diminished the quality audit also decline The study of Sisumic (1984), Beck et al (1988) also pointed out that the provision of non-audit services can increase economic relationships between auditors and clients This relationship is increasingly strict then the result in audit quality would be affected in a negative way The previous study of Mautz and Sharaf (1961) have mentioned the service management consulting and tax advisory firm providing audit will affect the independence of the audit firm Also, according to Simunic (1984), the economic relationship between the customer and the audit firm may increase due to a combination of providing non-audit services and audit services This reason has made auditing firms tend to make concessions to customers when there is disagreement in the process of performing the audit aims to keep customers 2.2.3 Issues Related to Auditors and Manager of Audit Firm The knowledge and capabilities of the auditor is the factors that related and directly influence the quality of the audit quality The results of many studies showed specialized knowledge of every detail accumulated through customer before, assigned tasks and professional experience in occupations related to the evaluation of higher quality of audit Users (Bonner, 1990) and required for professional development audit (Frederick & Libby, 1986; Bonner & Lewis, 1990) Other studies also indicate the knowledge and capabilities of the auditor plays a very important role in the discovery of errors in the audit process (Owhoso et al., 2002), meant so decided the results of the implementation of the analytical procedures (Wright, 1997) or assess the components of audit risk (Low, 2004; Hammersley, 2006; Maroney & Simnett, 2009) Also study of O’Keefe et al (1994) also pointed out the close relationship between knowledge and capabilities with compliance with generally accepted Auditing Principles (GAAPs) Research by Chen et al (2009) noted a positive relationship between the professional skepticism and audits Specifically, auditors perform a higher level of professional skepticism or perform additional procedures when abnormalities (Shaub & Lawrence, 1996), or notice is more likely to detect fraud, less confidence in customers, and is likely to invest in a high level for the efforts in the audit process The related between the personality of the auditors and the audit quality is also interested research of Kelly and Margheim (1990), Raghunathan (1991) show that audit quality is not always be achieved through analyzing the behavior of auditors in auditing the same company If auditors tend to overlook the audit procedures, the audit quality certainly will be affected in a negative direction These authors identify that the practices that reduce audit quality is defined as the act of auditors that reduce the effectiveness and relevance of the evidence testing collect payment The study of Malone and go after as Roberts (1996) about the relationship between the behavioral impact of reduced audit quality and time pressure on the assigned tasks specified feel pressure each auditor on the 84 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 procedures for management and audit quality review of the company they are working with inversely proportional relationship with practices that reduce audit quality Also Wooten (2003) showed that the control of the owner of stake and audit managers, the experiences of the auditors on trades and business activities of our customers, the professionalism of auditors, perseverance and professional skepticism that affect audit quality 2.2.4 Audit Fees Up to now, there are several researches mention the impact of audit fees to audit quality Although there are many different views, but basically the idea that the reduction of audit fees often leads to reduced audit quality, many researchers agreed Explanation for this is that the lower of fees may affect the time and cost to prepare for the audit will be lowered thereby causing pressure and difficulty for auditors in the release out of material misstatement The first is research by De Angelo (1981) with the introduction of the model audit fees and expenses This model has helped to specify the relationship between the cost of the audit and the relationship with the customer Specifically, it is the audit firm tend to fix the audit fees in the first year under the actual cost that the company spent to obtain additional profit in the future from the implementation of this contract This also creates economic relationship with customers thereby undermine the independence of auditors and lead to reduced audit quality After that, the research of Francis and Simon (1987), Simon and Francis (1988), Crasswell and Francis (1999) also provided further evidence that the auditing companies tend to reduce audit fees for the first year for more customers 2.2.5 Quality Control from Inside and Outside Audit Firm In his research going into the evaluation the fundamental limitations of quality control mechanisms for independent auditing activities in Vietnam in both aspects of quality control from inside and outside audit firms, the author Tran K Lam (2011) said that: “The independent auditing firms in Vietnam, which have greater scale, lager financial resources as abundant, higher index quality audit and rotation of auditors periodically, consistently achieve better audit quality; lowering the cost of the audit have certain influence on the quality of the audit Majority of small audit firms lack the resources should not be able to maintain or implement steadily the building systems and defense policy Quality control procedures effectively; the implementation of quality control from the inside of the independent audit firms in Vietnam have not been adequate attention” Also through his research, the author Ha (2011) has gone further into the assessment of the status of quality control audit of financial statements of entities in the public interest Vietnam in the period from 2008-2010 Research results have shown the relationship between control external quality audit quality is very necessary and extremely important, especially the audit of financial statements of listed companies, public companies in Vietnam Earlier studies of Vu M Hai (2007), Tran T G Tan (2009, 2010) has also said that audit quality control from inside acted extremely important impact on the quality of reports audit and providing information to various audiences use 2.2.6 Career Development Strategy and Legal Basis Some studies of many authors have pointed out the close relationship between quality audit at the audit enterprise with the trade development strategy by the Government and published professional associations, as well as the War business strategy of audit firms This proven and shown through many studies (such as Ngo T Chi Bui Mai, 2006; Vuong Hue, 2006; Le Phuong, 2006; Tran Anh, 2008) Beside that many studies have shown that the legal basis is one of the factors that have great influence on the quality of independent auditing activities in Vietnam This is demonstrated through the study of Ha Ha (2007), Ngo Ha (2007), Doan Tien (2009), Nguyen Do (2010) All of these studies have indicated: strategic and legal basis as tight, complete the audit quality as possible 2.2.7 Organizational Operation Models and Ownership of the Audit Firm On this aspect also had many scientists have given different views on the organizational model audit activities and its impact on the quality of audit Typical may include research organizations operating models perspective, according to the relationship between the organizations promulgating auditing standards, monitoring audit work with audit firms Vu Duc (2002) Accordingly, whether self-control models, models statutory, independent commission models or state model - advisory council, each models offers a significant influence on the quality of auditing activities mathematics; and different countries depending on several factors to choose and apply 85 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 appropriate models Besides, there are also studies on the organization and operation models in terms of subjects conducting audit of Alvin A Arens (2000) In view of this, the researchers have two organizational models that audit activities are role models through individual (private office audit) and models entities (audit firms with the various forms of ownership) Simultaneously with the study of Alvin A Arens (2000), the study by Oxera Consulting Ltd (2007) also pointed out the different forms of ownership, it has different effects on the quality and efficiency of audit Additionally the study also point to the organizational model audit activities in terms of organization and management of enterprise activities such as research audit of Phan L T Long (2009) organization and management models audit of various activities such as models Network, Associations and Alliances, Organisations Each models shall have a certain influence on the quality of audit activities of the audit firms at different levels Second, the research refers to a variety of factors affect the quality of audit There are many studies in recent research mentioned in the view that the impact on audit quality include many factors Typically, some of the following research: Lin Ling’s research and Tepalagul Nopmanee Kong (2010) pointed out that: the factors affecting the quality of the audit focused on a number of factors related to threats to the independence of auditors as : the importance of the customer, non-audit services, the auditor’s term, the relationship between customer and staff auditors Meanwhile according to Robert Knechel et al (2012) says: tenure of the auditors; market perception of the quality audit; fees for non-audit services; work pressure as well as professional knowledge, ability cynical nature as well as career-related policy and incentive to encourage employees, audit quality; deal with customers … are the factors that affect to audit quality Besides, the study of UK Financial Reporting Council- FRC (2008) show that the factors affecting the quality of the audit included a number of factors such as audit firm’s culture, the effectiveness of the audit process, the relevance and usefulness of the report audit was announced, skills and quality of human resources, factors outside the control of the auditors In each of the above factors affect the FRC has continued in-depth analysis and provide criteria for evaluation Such as factors related to the culture of the company auditor is satisfied based on several criteria such as creating environments to achieve higher added value in terms of quality, and remuneration policies Bonus and ensure employees can have enough time and resources to solve difficult problems While factors related to the effectiveness of the audit process in the company is analyzed based on criteria such as design methodologies and audit tools, the implementation of standards of professional ethics and auditing standards, technical support and so on Summary, from a review of studies presented above may have the conclusion that, depending on the perspective and the perspective of the authors study the factors that affect audit quality, because audit quality is the invisible product and received concern of many objects The views of the author of that article is the quality audits always influenced by many different factors, so on the basis of the theoretical foundation and the research of other authors before; simultaneously combined with in-depth interviews reviews of some experts in the field of audit, finance and accounting in Vietnam, the authors propose a model as follows: 86 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 Legal basis (CSPL) Organizational operation Outside quality contrtol (MH) (KSBT) Ownership (HTSH) The audit Career development activities quality strategy (CL) in Viet Nam (CLKT) The size of auditing firms Inside Quality control (QM) (KSBN) Capability of audit (TDNL) Scope of the audit service Audit fees (PV) (GP) Figure Proposed model of factors affecting the audit activities quality in Viet Nam Data and Research Methodology Data was collected from the survey conducted in the 4th quarter of 2013 and the 1st, 2nd quarter of 2014 with opinion of the auditors, the managers at the audit firm in all the different cities in Vietnam Results have 400 peoples (out of a total of more than 1,000 auditors available in Vietnam) participated in this research survey After the exclusion of invalid survey panels, the total quantity of qualified panels is 387 panels which are sufficient to assure the credibility of data analysis To achieve the goals set at the beginning of this article, the author has used a combination of the methods of qualitative research and quantitative research methods including quantitative determination is essential Qualitative research methods were conducted through interviewing techniques expert opinion To obtain feedback on the factors affecting the quality of auditing activities, the author has collected the opinions of various experts groups including managers of the Ministry of Finance, Vietnam Association Certified Public Accountant (VACPA), the general manager, CEO, audit partner of the auditing firms have large scale On the basis of gathering opinions from experts, authors have drafted a questionnaire survey conducted surveys simultaneously try to check the suitability of content questions, adjust and rearrange the questions thereby forming an official scale to serve the large-scale survey on the audit in most audit firms in all cities and provinces in Vietnam Quantitative research methods used by the author through the steps: designing the study sample, collected data from surveys, data analysis by SPSS version 15.0 software This software is used to summarize and present the basic data regarding the frequency table appear survey variables, statistical description of factors and their impact on the quality of audit activities In this study, first author used the technique Cronbach’s Alpha Test to test the factors in the scale then use techniques Exploratory Factor Analysis (EFA) to reduce the observed variables, renamed variables and modeling shortened; author finally ran regression models through regression analysis techniques in order to conclude a final assessment of the factors that affect the quality of auditing activities in Vietnam Result and Discussion In this survey, the authors propose a model of 42 variables independent observers (variables) gathered in 10 groups of factors (Factors) and observers for the dependent variable To test the reliability of the scale model of the original author used the Cronbach’s Alpha testing The result is that all these factors are consistent and not remove any marginal observations from the model 87 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 Table Testing the rating scale by Cronbach’s Alpha reliability coefficient (reliability statistics item-total statistics) Rating scale of Factor No.1, Cronbach’s Alpha = 0.821 Items Scale Mean if Item Deleted Scale Variance Deleted MH1 13.6460 MH2 if Item Corrected Item Total Correclation Cronbach’s Alpha if Item Deleted 8.338 714 757 13.5426 8.855 725 761 MH3 13.7907 8.083 686 764 MH4 14.2145 9.169 445 839 MH5 13.9121 8.920 551 805 Rating scale of Factor No.2, Cronbach’s Alpha = 0.891 HTSH1 15.0517 11.215 662 883 HTSH2 15.0930 10.437 743 866 HTSH3 15.2093 9.824 761 862 HTSH4 15.2584 10.057 782 857 HTSH5 15.2946 9.975 733 869 Rating scale of Factor No.3, Cronbach’s Alpha = 0.823 QM1 14.88372 9.746 346 861 QM2 14.65891 7.588 756 743 QM3 14.64599 7.494 794 731 QM4 14.55556 8.797 647 781 QM5 14.66150 8.525 576 799 Rating scale of Factor No.4, Cronbach’s Alpha = 0.701 TDNL1 13.9793 5.994 430 664 TDNL2 13.8941 5.245 707 543 TDNL3 13.7933 5.693 602 593 TDNL4 13.8475 6.383 378 683 TDNL5 13.3953 6.711 232 747 Rating scale of Factor No.5, Cronbach’s Alpha = 0.825 PL1 11.6512 4.451 685 764 PL2 11.5943 4.387 784 723 PL3 11.5943 4.423 590 811 PL4 11.5788 4.706 564 818 Rating scale of Factor No.6, Cronbach’s Alpha = 0.788 KSBN1 11.17571 6.171 310 872 KSBN2 10.93540 4.563 744 654 KSBN3 11.03618 4.356 786 628 KSBN4 10.89922 5.593 605 735 Rating scale of Factor No.7, Cronbach’s Alpha = 0.780 CL1 7.2817 2.633 510 831 CL2 7.3411 2.635 681 638 CL3 7.3204 2.565 678 637 88 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 Rating scale of Factor No.8, Cronbach’s Alpha = 0.831 KSBT1 11.1550 5.100 796 723 KSBT2 11.1214 5.190 747 745 KSBT3 11.1318 5.788 668 784 KSBT4 11.1731 6.164 456 877 Rating scale of Factor No.9, Cronbach’s Alpha = 0.817 PV1 7.5556 2.315 655 766 PV2 7.5788 2.467 682 737 PV3 7.6305 2.462 674 744 Rating scale of Factor No.10, Cronbach’s Alpha = 0.838 GP1 10.4031 5.257 531 854 GP2 10.3721 4.271 809 728 GP3 10.3204 4.679 699 781 GP4 10.3695 5.140 654 802 Rating scale measuring the audit activities quality in VietNam, Cronbach’s Alpha = 0.763 CLKT1 10.5788 5.006 592 693 CLKT2 10.6098 4.928 565 706 CLKT3 10.9302 4.889 456 771 CLKT4 10.6408 4.557 655 655 As can be seen in the test result of the rating scale measuring the audit activities quality in Viet Nam, the Cronbach’s Alpha = 0.763 (>0.6), the gross correlation coefificients are approximately or greater than 0.5 (much more than the acceptable level of 0.3); hence, the reliability of this rating scale is acceptable After the Cronbach’s Alpha test, we used the result acquired from the summary of 387 eligible answers and input variables into EFA to take out factors The result of the selection of Varimax rotation and shortened down to the variable load factor less than 0:55 after the second time running, the results showed: KMO = 0.849 with Sig = 0.000 significance level and extracting factors with the gross s variance extracted = 72.505% From the original model with 10 factors that affect the models stripped after testing run EFA remaining seven factors detailed results through the following table Table Result of the second exploratory factor analysis with varimax rotation (KMO and Bartlett’s test) Kaiser-Meyer-Olkin Measure of Sampling Adequacy 849 Bartlett's Test of Sphericity Initial Eigenvalues % Approx Chi-Square 9446.951 Df 496 Sig .000 Extraction Sums of Squared Loadings of % Rotation Sums of Squared Loadings of % of Component Total Variance Cumulative % Total Variance Cumulative % Total Variance Cumulative % 10.110 31.592 31.592 10.110 31.592 31.592 5.583 17.447 17.447 4.250 13.282 44.875 4.250 13.282 44.875 4.325 13.515 30.962 2.657 8.303 53.178 2.657 8.303 53.178 3.529 11.029 41.990 2.128 6.649 59.827 2.128 6.649 59.827 2.662 8.318 50.308 1.611 5.034 64.861 1.611 5.034 64.861 2.570 8.031 58.339 1.327 4.147 69.007 1.327 4.147 69.007 2.348 7.337 65.677 1.119 3.497 72.505 1.119 3.497 72.505 2.185 6.828 72.505 89 www.ccsenet.org/ijbm International Journal of Business and Management 900 2.812 75.316 774 2.420 77.736 10 707 2.210 79.946 11 623 1.947 81.893 12 590 1.845 83.738 13 545 1.702 85.440 14 491 1.535 86.975 15 417 1.304 88.279 16 395 1.234 89.513 17 365 1.140 90.653 18 347 1.083 91.736 19 339 1.058 92.794 20 323 1.008 93.802 21 305 954 94.756 22 240 750 95.505 23 219 686 96.191 24 206 644 96.835 25 176 551 97.386 26 161 504 97.890 27 146 455 98.345 28 129 404 98.749 29 118 369 99.118 30 103 321 99.438 31 094 292 99.731 32 086 269 100.000 Vol 11, No 3; 2016 Extraction Method: Principal Component Analysis Rotated Component Matrixa Factor MH1 824 MH2 783 MH3 737 MH4 573 MH5 710 HTSH3 698 HTSH4 677 HTSH5 645 QM2 716 QM3 751 QM4 872 TDNL2 800 TDNL3 752 TDNL4 576 PL1 826 PL2 832 KSBN2 847 KSBN3 828 KSBN4 768 CL1 672 CL2 741 90 www.ccsenet.org/ijbm CL3 International Journal of Business and Management Vol 11, No 3; 2016 680 KSBT1 815 KSBT2 783 KSBT3 843 PV1 631 PV2 757 PV3 737 GP1 682 GP2 857 GP3 797 GP4 757 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations As can be seen, factors with the gross variance extracted equal to 72.505%, which mean these factors can explain for 72.505% of the audit activities quality in Viet Nam, the remaining 27.495% depends on other factors that are oversaw in this study The calibration model comprises of factors that have inpact on the quality of auditing activities in Vietnam, namely: factor no 1, which is referred to in our study as “Governance of the audit profession” (QUANLYNHANUOC); factor no called “Contingent capacity and audit fees”; factor no called “Organizational model audit activities” (MOHINHTOCHUC); factor no called “Ownership of auditing firms” (HINHTHUCSOHUUDNKT); factor no called “Quality control from outside” (KSCLBENNGOAI); factor no called “Quality control inside” (KSCLBENTRONG) and the final factor called “Scope of the audit service provide to client” (PHAMVICCDV) Governance of the audit profession (QUANLYNHANUOC) External quality control Contingent capacity and audit fees (GIAPHIVANANGLUC) (KSCLBENNGOAI) The audit activities quality in Viet Nam Organizational model audit activities (CLKT_VIETNAM) (MOHINHTOCHUC) Internal quality control (KSCLBENTRONG) Scope of the audit service provide Ownership of auditing firms (PHAMVICCDV) (HINHTHUCSOHUUDNKT) Figure Calibrated model After renaming the variables, the author has again using Cronbach's Alpha testing to assess the new factors in the model calibration The results of this test presented in Table shows that the model is considered appropriate 91 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 Table Testing the calibrated model by Cronbach’s Alpha reliability coefficient Scale Mean if Item Scale Variance if Item Corrected Deleted Deleted Correlation Item-Total Cronbach's Alpha if Item Deleted QUANLYNHANUOC 25.4092 12.798 622 788 GIAPHIVANANGLUC 25.7182 14.553 315 826 MOHINHTOCHUC 25.6871 13.102 564 796 KSCLBENNGOAI 25.4171 12.976 486 807 KSCLBENTRONG 25.4180 12.784 522 802 HINHTHUCSOHUUDNKT 25.4197 12.170 584 793 PHAMVICCDV 25.3482 12.756 612 789 CLKT_VIETNAM 25.5791 12.910 621 789 After successfully developing the model of factors that affect the audit activities quality in Viet Nam, we processed to assess this model by Multiple Regression (MLR) model to test its appropriateness and to examine the extent to which these factors influence the audit quality The result of MLR analysis generated by SPSS with “Enter” method is as follows: Table Result of assessing the calibrated model (model summaryb) Model R R Square Adjusted R Square Std Error of the Estimate 778(a) 606 599 44754 ANOVA(b) Model Sum of Squares df Mean Square F Sig Regression 116.664 16.666 83.211 000(a) Residual 75.910 379 200 Total 192.574 386 Table Result of MRL with individual regression coefficients in the model Unstandardized Model Standardized Coefficients Collinearity Statistics Coefficients B Std Error (Constant) -.060 174 QUANLYNHANUOC -.065 043 GIAPHIVANANGLUC 207 MOHINHTOCHUC 628 KSCLBENNGOAI KSCLBENTRONG Beta t Sig -.342 732 Tolerance VIF -.067 -1.511 132 526 1.902 038 192 040 641 5.442 000 835 1.197 15.665 000 621 1.609 141 033 079 034 166 4.249 000 684 1.461 093 2.326 021 649 HINHTHUCSOHUUDNKT -.127 1.542 037 -.159 -3.458 001 492 2.032 PHAMVICCDV 168 041 177 4.112 000 563 1.775 a Dependent Variable: CLKT_VIETNAM MLR result shows that adjusted R2 = 0.599, F-test (ANOVA table) expresses the significance level sig = 0.000; thus, the regression model is suitable and these factors can explain 59.9% of the variations of the dependent variable Considering the regression weights, we can identify the positive correlation between these factors and the audit activities quality (CLKT_VIETNAM), these variables are statistically significant due to sig = 000), there is no sign of multicollinearity, or to be specific, these variables are not inter-correlated Also, if based on Table 5, the factor no.1 “Governance of the audit profession” with Sig = 0.132 > 0.05 so inappropriate and discarded Based on Beta coeffiecient, we can arrange the order affects audit quality of these 92 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 factors in turn were: organizational model of business operations audit (factor no 3), Contingent capacity and audit fees (factor no 2), scope of service provider (factor no 7), external quality control (factor no 4), internal quality control (factor no 5); Factors no have negative impact on audit quality Thus the model factors affecting audit quality Vietnam remaining six factors with specific equation is: Quality audit Vietnam = 0.192* Audit fees and capability + 0.641* Model of organization and operation of audit firm + 0166* External quality control + 0.093* Control internal quality -0.159* ownership of auditing firms + 0.177* Scope of the audit service provide to client Conclusion This is an empirical study on the pattern of factors affecting the quality of audit activities in Vietnam in recent years Based on the results of research, we came up with the key factors that affect the quality of audit activities were: organizational and operations of audit firm , prices and costs staff capacity of auditing firms , scope of supply of business services to audit clients external quality control ,internal quality control; private ownership of auditing firms Detection is very important to advice given reasonable solutions thereby improving the quality of audit activities in Vietnam in the coming time References Arezoo, A C (2011) Review of studies on audit quality International Conference on Humanities, Society and Culture, 20, 312-317 http://dx.doi.org/10.2139/ssrn.2227359 Chia, C L (2008) Effects of size on operating result of audit firms with strategic alliances: An empirical study International Journal of Management, 25, 706-779 Davidson, R A., & Neu (1993) A note on the association between audit firm size and audit quality Contemporary accounting research, 2, 479-488 http://dx.doi.org//10.1111/j.1911-3846.1993.tb00893.x DeAngelo, L E (1981a) Auditor independence, ‘low balling’, and disclosure regulation Journal of Accounting and Economics, 3, 113-127 http://dx.doi.org/10.1016/0165-4101(81)90009-4 DeAngelo, L E (1981b) Auditor size and audit quality Journal of Accounting and Economics, 3, 183-199 http://dx.doi.org/10.1016/0165-4101(81)90002-1 Financial Reporting Council (2008) The audit quality framework Retrieved from http://www.frc.org.uk/Our-Work/Publications/FRC-Board/The-Audit-Quality-Framework-%281%29.aspx Francis, J R (2011) A framework for understanding and researching audit quality Auditing: A Journal of Practice & Theory, 2, 125-152 http://dx.doi.org/10.2308/ajpt-50006 Lennox, C (2005) Management ownership and audit firm size Contemporary Accounting Research, 1, 205-227 http://dx.doi.org/10.1506/K2CG-U6V0-NPTC-EQBK Leslie, G C (1985) International auditing: A comparative survey of professional requirements in Australia, Canada, France West Germany, Japan, the Netherlands, the U.K and the U.S.A London: Macmillan Linda, E D (1981) Auditor size and audit quality Journal of Accounting and Economics, 3, 183-199 http://dx.doi.org/10.1016/0165-4101(81)90002-1 Ngo, T C (2008) Staff in Accounting - auditing in terms of integration: From the practical need to target training Journal of Auditing, 10, 9-12 Oxera Consulting Ltd (2007) Ownership rules of audit firms and their consequences for audit market concentration Rita, Y (2011) Audit firm size, audit fee and audit quality, International conference on business and economic research Widyatama University Bandung, Indonesia Robert, K W., & Gropal, V K (2012) Audit Quality: Insights from the Academic Literature http://dx.doi.org/10.2308/ajpt-50350 Timothy, J L (2011) Auditing and Assurance Services (4th ed.) Mc GrawHill Tran, K L (2011) Construction quality control mechanism for independent auditing activities in Vietnam Ph.D Thesis, University of Economics Ho Chi Minh City, Viet Nam Tran, T G T (2009) Quality control from external independent audit activities Finance Publishing 93 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 Tran, T K A (2008) Vietnam international economic integration in the field of accounting and auditing: Situation and solutions Ph.D Thesis Ha Noi foreign trade University, Viet Nam Vu, H D (2002) Construction system audit standards Vietnam Ph.D Thesis University of Economics Ho Chi Minh City, Viet Nam Wooten, T C (2003) Research about audit quality CPA Journal, 73, 48-51 Copyrights Copyright for this article is retained by the author(s), with first publication rights granted to the journal This is an open-access article distributed under the terms and conditions of the Creative Commons Attribution license (http://creativecommons.org/licenses/by/3.0/) 94 [...]... the pattern of factors affecting the quality of audit activities in Vietnam in recent years Based on the results of research, we came up with the key factors that affect the quality of audit activities were: organizational and operations of audit firm , prices and costs staff capacity of auditing firms , scope of supply of business services to audit clients external quality control ,internal quality control;... for independent auditing activities in Vietnam Ph.D Thesis, University of Economics Ho Chi Minh City, Viet Nam Tran, T G T (2009) Quality control from external independent audit activities Finance Publishing 93 www.ccsenet.org/ijbm International Journal of Business and Management Vol 11, No 3; 2016 Tran, T K A (2008) Vietnam international economic integration in the field of accounting and auditing:... London: Macmillan Linda, E D (1981) Auditor size and audit quality Journal of Accounting and Economics, 3, 183-199 http://dx.doi.org/10.1016/0165-4101(81)90002-1 Ngo, T C (2008) Staff in Accounting - auditing in terms of integration: From the practical need to target training Journal of Auditing, 10, 9-12 Oxera Consulting Ltd (2007) Ownership rules of audit firms and their consequences for audit market concentration... affecting audit quality Vietnam remaining six factors with specific equation is: Quality audit Vietnam = 0.192* Audit fees and capability + 0.641* Model of organization and operation of audit firm + 0166* External quality control + 0.093* Control internal quality -0.159* ownership of auditing firms + 0.177* Scope of the audit service provide to client 5 Conclusion This is an empirical study on the pattern... ownership of auditing firms Detection is very important to advice given reasonable solutions thereby improving the quality of audit activities in Vietnam in the coming time References Arezoo, A C (2011) Review of studies on audit quality International Conference on Humanities, Society and Culture, 20, 312-317 http://dx.doi.org/10.2139/ssrn.2227359 Chia, C L (2008) Effects of size on operating result of audit. .. (1981b) Auditor size and audit quality Journal of Accounting and Economics, 3, 183-199 http://dx.doi.org/10.1016/0165-4101(81)90002-1 Financial Reporting Council (2008) The audit quality framework Retrieved from http://www.frc.org.uk/Our-Work/Publications/FRC-Board /The- Audit -Quality- Framework-%281%29.aspx Francis, J R (2011) A framework for understanding and researching audit quality Auditing: A Journal of. .. International Journal of Business and Management Vol 11, No 3; 2016 factors in turn were: organizational model of business operations audit (factor no 3), Contingent capacity and audit fees (factor no 2), scope of service provider (factor no 7), external quality control (factor no 4), internal quality control (factor no 5); Factors no 6 have negative impact on audit quality Thus the model factors affecting. .. Rita, Y (2011) Audit firm size, audit fee and audit quality, International conference on business and economic research Widyatama University Bandung, Indonesia Robert, K W., & Gropal, V K (2012) Audit Quality: Insights from the Academic Literature http://dx.doi.org/10.2308/ajpt-50350 Timothy, J L (2011) Auditing and Assurance Services (4th ed.) Mc GrawHill Tran, K L (2011) Construction quality control... of Practice & Theory, 2, 125-152 http://dx.doi.org/10.2308/ajpt-50006 Lennox, C (2005) Management ownership and audit firm size Contemporary Accounting Research, 1, 205-227 http://dx.doi.org/10.1506/K2CG-U6V0-NPTC-EQBK Leslie, G C (1985) International auditing: A comparative survey of professional requirements in Australia, Canada, France West Germany, Japan, the Netherlands, the U.K and the U.S.A London:... strategic alliances: An empirical study International Journal of Management, 25, 706-779 Davidson, R A., & Neu (1993) A note on the association between audit firm size and audit quality Contemporary accounting research, 2, 479-488 http://dx.doi.org//10.1111/j.1911-3846.1993.tb00893.x DeAngelo, L E (1981a) Auditor independence, ‘low balling’, and disclosure regulation Journal of Accounting and Economics,